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Home Affordable Refinance Program (HARP) Loans

Latest update on HARP

On November 15, 2011, Fannie Mae and Freddie Mac released updated guidelines for the newest version of the Home Affordable Refinance Program. The updates are designed to help as many as one million homeowners refinance at today’s low mortgage rates.

It appears that many lenders are going to participate in the program, although we won’t know for sure until individual investors release their own overlays for this program.

Some of the key features of the program include:
  • HARP is now extended through the end of 2013.
  • In order to be eligible, loans must have been purchased by Fannie Mae or Freddie Mac before May 31, 2009 and have loan-to-value ratios of at least 80%.
  • The 125% LTV cap on fixed rate mortgages has been eliminated (there is still an LTV cap of 105% on adjustable rate mortgages).
  • To qualify, borrowers must be current on their mortgage for the last six months, and have no more than one late payment over the past year.
  • New appraisals may not be needed to qualify.

As more details of the updated program emerge, we will update this space.

On October 24, 2011, the Federal Housing Finance Agency announced that it is making a series of changes to the Home Affordable Refinance Program (HARP). The changes are intended to allow even more underwater homeowners refinance under HARP. The biggest change is the elimination of the 125 LTV ceiling on HARP loans. This means that theoretically, a borrower can refinance no matter how far they are underwater.

Some of the proposed changes include:

  • Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
  • Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;
  • Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;
  • Eliminating the need for a new property appraisal where there is a reliable AVM
  • (automated valuation model) estimate provided by the Enterprises; and
  • Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before May 31, 2009.

    • Only those who have a job and are current on their Freddie Mac- or Fannie Mae-owned mortgages are eligible for the new program. Those who have already refinanced with HARP are not eligible.

    Edward Demarco, the Acting Director of the FHFA commented:

    “We know that there are many homeowners who are eligible to refinance under HARP and those are the borrowers we want to reach. Building on the industry’s experience with HARP over the last two years, we have identified several changes that will make the program accessible to more borrowers with mortgages owned or guaranteed by the Enterprises. Our goal in pursuing these changes is to create refinancing opportunities for these borrowers, while reducing risk for Fannie Mae and Freddie Mac and bringing a measure of stability to housing markets”.

    Fannie Mae and Freddie Mac will issue guidance on the HARP updates to lenders and servicers by November 15, 2011. At that time we should have additional clarity on the eligibility requirements for the new version of HARP. It is possible that these changes could take effect as soon as December 2011.

What is Home Affordable Refinance Program (HARP)?

HARP is a government program designed to bring affordable payments to millions of homeowners and help in the prevention of the devastating effects of foreclosure. Millions of homeowners who bought homes near the peak of the housing market found they owned more on their homes than their homes are worth. But they now use a HARP loan to avoid foreclosure, decrease their mortgage rate, and lower their payment.

How to Qualify for HARP?

To qualify for a HARP mortgage, homeowners must have a mortgage that is owned or guaranteed by Fannie Mae or Freddie Mac, have a one to four unit home as their primary residence, be current on their mortgage (no late payments more than 30 days in the last 12 months), have a home that has decreased in value, have a first mortgage not over 125 percent of the home's current value.

To find if you can refinance your mortgage through HARP, complete the form on the right to be contacted by one of our mortgage professionals, or call Total Mortgage at 877-868-2503 to speak to a licensed loan officer now. A mortgage expert can find out if you qualify for a HARP loan and secure the lowest available mortgage rate possible for you.

In addition to HARP loans, Fannie Mae and Freddie Mac have unveiled DU Refi Plus™ and Relief Refinance℠ Mortgage, respectively, to complement the federal government's Making Home Affordable program.

DU Refi Plus™ and Relief Refinance℠ and HARP loans

DU Refi Plus™ and Relief Refinance℠ Mortgage have been designed - along with HARP loans - to help homeowners who have not been late with their monthly mortgage payments, yet are unable to benefit of the historically low mortgage rates by refinancing because the value of their home has declined so greatly, thus increasing their loan-to-value (LTV) over 80%. It is anticipated that DU Refi Plus™ and Relief Refinance℠ Mortgage will prove HARP loans successful.


HARP loans: Quicker, smoother and more cost-effective

The flexibility within HARP loans allows for the refinance process to be quicker, smoother and more cost-effective for the lender and the borrower. Requirements for HARP loans are less restrictive and less cumbersome, with the appraisal even being waived under certain circumstances.

The criteria for qualifying for HARP loans include:

  • Property eligibility requires the home to be a 1- to 4-unit primary residence
  • Existing mortgage loan must be secured by either Freddie Mac or Fannie Mae
  • Monthly mortgage payments must be current (no late payments of 30 days or more in the past 12 months)
  • Maximum LTV is 125%
  • New refinance loan must improve the borrower's position

HARP loans will be able to help millions of Americans save on their monthly mortgage payments, regardless if their home has lost value.

HARP loans are only eligible through June 2010. UPDATE: They have been extended through June 30, 2012. See update at the top of the page.


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